Apple Faces High-Stakes Intellectual Property Case with Medical Firm Masimo over Allegations of Stealing Trade Secrets to Develop the Apple Watch
Apple has faced a high-stakes intellectual property case with medical firm, Masimo, over allegations of stealing trade secrets to develop the Apple Watch. Masimo has accused Apple of poaching its employees and stealing trade secrets to develop the pulse oximetry sensor used in the Apple Watch. The company has sought over $1.8 billion in damages and co-ownership of five Apple pulse oximetry patents that Masimo claims used its technology. The case has been ongoing for several weeks, with both sides presenting their arguments to the court. Masimo's lead trial lawyer emphasized that the case was about specific alleged trade secrets that Masimo accused Apple of misappropriating. He worked to make the trial about credibility and asked Apple employees if they violated intellectual property laws and misappropriated trade secrets. All employees denied the accusations.
However, during the trial, an Apple witness violated a pre-trial order from U.S. District Judge James V. Selna meant to limit the amount of evidence to be presented. As a result, the judge reversed the order, allowing Masimo to reveal more evidence potentially detrimental to Apple. Jurors learned that Apple had hired as many as seven employees from Masimo, not just two as originally thought. The case has been a significant win for Masimo, who had won their preliminary case with the International Trade Commission but also brought their charges in front of the US District Court.
The ongoing US District Court lawsuit from Masimo against Apple ended in a mistrial after jurors could not reach a unanimous vote. Masimo sought as much as $1.85 billion in damages, claiming that was the amount of illegal profit Apple earned from using its technology. On Monday, the judge heard from jurors in federal court located in Santa Ana, California, who reported that they were unable to come to a unanimous decision. Out of the seven panelists, six of them voted to acquit the iPhone manufacturer of any wrongdoing. The lawsuit had originally sought $3.1 billion in unjust enrichment related to 12 alleged trade secrets Masimo said Apple misappropriated when developing the pulse oximetry sensor for the Apple Watch Series 6. Last week, Judge Selna dismissed six trade secret claims concerning Apple's business and marketing strategies. However, there are still six remaining claims that were valued at $1.8 billion by a Masimo expert. Masimo was also looking to become a co-owner of five patents owned by Apple.
In response to the mistrial, Masimo said that they would retry the case and continue to pursue legal redress against Apple. The US Trade Commission is also scheduled to decide in the coming months whether to ban the importation of certain models of the Apple Watch, following a ruling last year by an Administrative Law Judge that Apple infringed one of Masimo’s patents for pulse oximetry. Apple has maintained that there was no Masimo IP used in its work on the Apple Watch and that what Masimo claims are “trade secrets” are ideas “long known and used by multiple companies.”
The case has highlighted the importance of protecting intellectual property rights and the potential consequences of violating them. It has also shown the need for companies to be transparent and honest in their dealings with competitors and to avoid engaging in unethical business practices that could harm their reputation and lead to costly legal battles. Overall, the outcome of the case will likely have significant implications for the tech industry and the protection of intellectual property rights.
0. “Apple's Damages Exposure Cut as Masimo Secrets Case Goes to Jury” Bloomberg, 26 Apr. 2023, https://www.bloomberg.com/news/articles/2023-04-26/apple-s-damages-exposure-cut-as-masimo-secrets-case-goes-to-jury
1. “Apple’s Damages Exposure Cut as Masimo Secrets Case Goes to Jury” HT Tech, 28 Apr. 2023, https://tech.hindustantimes.com/tech/news/apples-damages-exposure-cut-as-masimo-secrets-case-goes-to-jury-71682619658957.html
2. “BREAKING NEWS:Mistrial Declared In Apple Watch Patent Case – channelnews” ChannelNews, 2 May. 2023, https://www.channelnews.com.au/breaking-newsmistrial-declared-in-apple-watch-patent-case/
3. “Apple's Trade Secret Battle With Masimo Over Pulse Oximetry Technology Ends in Mistrial” MacRumors, 1 May. 2023, https://www.macrumors.com/2023/05/01/apple-masimo-trade-secret-lawsuit-mistrial/
4. “In Masimo v. Apple Trial Twist, Jurors Suddenly Learn Apple Hired Many Masimo Employees” Strata-gee.com, 27 Apr. 2023, https://www.strata-gee.com/in-masimo-v-apple-trial-twist-jurors-suddenly-learn-apple-hired-many-masimo-employees/
5. “Latest chapter of $2 billion Apple Watch patent battle ends in mistrial” AppleInsider, 1 May. 2023, https://appleinsider.com/articles/23/05/01/apple-watch-trial-endslatest-chapter-of-2-billion-apple-watch-patent-battle-ends-in-mistrial
6. “Apple-Masimo Trade Secrets Fight Ends With No Jury Verdict” Bloomberg, 1 May. 2023, https://www.bloomberg.com/news/articles/2023-05-01/apple-masimo-judge-declares-mistrial-in-trade-secret-theft-fight